Glass Lewis, the proxy advisory firm, has re-filed its report on Canadian telco Telus’ proposed shareholder conversion plan, telling clients they should vote in favour of the proposal.
“Glass Lewis believes that dual class voting structures are…
Glass Lewis, the proxy advisory firm, has re-filed its report on Canadian telco Telus’ proposed shareholder conversion plan, telling clients they should vote in favour of the proposal.
“Glass Lewis believes that dual class voting structures are typically not in the best interests of common shareholders, and accordingly, believes shareholders should support the proposed share conversion,” the agency said in the report sent to clients.
Only days ago another advisory firm, ISS, had come to the same conclusion.
Canadian telco Telus intends to convert all non-voting shares into voting common shares on a one-to-one basis in a move that requires approval by two thirds of holders of Telus common shares and non-voting shares.
Mason Capital, which has accumulated around 19% of shares in Telus, opposes the proposal in its current form. The New York based fund argues that the share conversion should reflect the fact that voting shares have historically traded at a premium of around 4% to 5% over non-voting shares.
Glass Lewis had given a recommendation in favour of a share conversion to its clients earlier, but it temporarily withdrew its report after Mason announced its opposition.
Discussing Mason’s opposition in its new note, Glass Lewis agreed that common shareholders historically paid a premium over holders of non-voting shares, and accordingly, “may recognize some economic shortcomings as a result of the conversion.
“However, we believe any short-term costs will be outweighed by the overall benefits of a simplified share structure.”
The shareholder vote is scheduled to take place on 9 May at the company’s annual shareholder meeting.